South Africa: UGG, What A Legal Mess!

Last Updated: 24 November 2017
Article by Gaelyn Scott

Most Read Contributor in South Africa, December 2017

There's an interesting trade mark dispute under way about UGG. It touches on a range of IP issues – geographical indications, generic terms, country-of-origin brands and Chinese manufacture.

Many readers will know that UGG is a sheepskin boot originating from Australia. UGG has apparently been around since the1930s, when it was created to deal with the cold winters in Australia (the Blue Hills region of New South Wales apparently can get cold). For some, the UGG boot is not particularly aesthetically pleasing, so it tends to be worn as a slipper.

Not in the US, however, where the UGG is something of a fashion item. UGG is also a registered trade mark in the US, and the registration belongs to a US company. The US company is now suing an Australian company that makes UGG footwear and exports it to the US. The US company alleges trade mark infringement and is claiming damages and delivery-up of the allegedly infringing goods. There have seemingly been some negotiations between the parties and the US company would like the Australian company to limit its sales to Australia and New Zealand. For obvious reasons, the Australian company wants to be able to export worldwide.

The US company is called Deckers and it apparently has registrations for UGG in a number of key markets including China, Japan and the EU – it seems that the US trade mark registration originally belonged to an Australian surfer who established a market in the US and then sold the trade mark. The Australian company that's being sued is called Australian Leather, and is small, with 40 employees and sales of 50 000 pairs annually. The two companies have bashed heads before. A few years back, Australian Leather complained about the fact that Deckers was selling footwear in Australia under the trade mark UGG Australia, whereas the product was in fact manufactured in China. The complaint was that the use of the word "Australia" was misleading, although there was also a suggestion that the Chinese manufacture enabled Deckers to under-cut Australian companies. Deckers responded by dropping "Australia" from the name.

The man behind Australian Leather, Eddie Oygur, is making all the right noises: "UGG is just the name for the boots, and we've sold them for nearly a century ... now a US giant has trademarked the name and wants to stop us." His company will be seeking to cancel the US trade mark registration, despite the fact that a previous challenge based on the generic nature of the trade mark failed. Oygur has the backing of an Australian senator, who says that UGG is to Australia what Champagne is to France, what Sherry is to Spain, what Port is to Portugal, and what Feta is to Greece. In other words, UGG is one of those names or geographical indications that should be protected.

It does seem that the issue of UGG has some history in Australian trade mark law. The trade mark Ugh-Boots was once registered in Australia by a surfer but it was later removed for non-use. At one stage, there was talk of an Australian Sheepskin Association protecting UGG as a generic name, but in 2010, a company called Luda was granted protection for the trade marks UGG Australia & Device and Made by UGG Australia, despite opposition by Deckers. It all sounds rather messy.

A branding expert from the University of Adelaide, Dean Wilkie, has added an interesting angle to this. He says that what Deckers is doing is trading on "secondary association, which in this case is the Australian lifestyle". Wilkie says that Deckers "plaster the boots with Australian images, and give consumers a strong country-of-origin perspective ... it portrays a laid-back, yet positive mood, which in turn puts the buyer in a positive frame of mind to buy." According to Wilkie, many consumers buy "country-of-origin" products not really caring where they are actually made, because "we are so numb to buying goods made in China." Interestingly, he says that UGG boots aren't really worn in public in Australia because they are a "bit daggy", and they're usually sold to tourists: "In the US it is seen as classy, just a little bit different, and a little edgy."

For South African readers, this may be somewhat reminiscent of rooibos. When it came to light that a US company had a US trade mark registration for the name of South Africa's much-loved tea, a registration that it would be using to stop South African companies exporting rooibos to the US, there was an outcry. In that case, the US registration had been obtained by a South African who eventually sold the business and trade mark to a US company. After much noise and bluster, the US company agreed not to enforce the registration against South African exporters. Ever since, the issue of geographic indications and designations of origin has been a hot topic in South Africa, with the government promising to take steps to ensure that names like rooibos are protected locally through laws, and abroad through international agreements.

The UGG story may also make some South Africans think about their iconic shoe, the velskoen. Although "vellies" are by no means regarded as infra dig by locals, they probably aren't that popular with millennials or fashionistas and, although they are bought by some tourists, they probably don't have the iconic status of UGG. However, it would still be pretty galling if South African manufacturers suddenly discovered that they could no longer export vellies because of trade mark registrations belonging to foreigners.

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